Bang & Olufsen interim report for Q1 2023/24

Significantly improved gross margin contributed to profitable growth in Q1 for Bang & Olufsen - Seite 2

Financial highlights, Q1 2023/24

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• Revenue grew by 1.2% (5% in local currencies) y-o-y. EMEA was up 26.7% (28% in local currencies), Americas up 6.2% (13% In local currencies) while APAC declined by 20.9% (16% in local currencies). Brand partnering & others declined by 16.1% (13% in local currencies) due to high comparables. Last year, the company ramped up the Bang & Olufsen Cisco 980 headset. Revenue driven by the automotive industry grew in the quarter.
• Like-for-like sell-out increased by 8%. In APAC sell-out grew by 29%, EMEA declined by 3% driven by high travel activity, while sell-out in Americas grew by 5%. Like-for-like sell-out in the eTail and eCommerce channels grew by 5% and 53%, respectively. The company-owned stores grew 1% in the quarter, while Monobrand and Multibrand declined.
• The gross margin was 52.6%, which was 16.0pp higher than last year. Compared to Q4, gross margin increased by 1.2pp. The normalisation of the company’s supply chains favourably affected the quarter.
• EBIT before special items was DKK 16m, equivalent to an EBIT margin before special items of 2.6%, against -14.1% last year.
• The free cash flow improved by DKK 20m and was DKK -61m (Q1 22/23: DKK -81m).

Strategic highlights, Q1 2023/24

• Bang & Olufsen launched a brand awareness campaign, 'See Yourself in Sound'. The campaign included customer interaction through Spotify to generate automated personalised avatars. It gained strong traction across markets.
• The customer base grew by 4% and the number of customers owning two or more Bang & Olufsen products increased by 3% year-on-year.
• The Win City concept for the cities, London, Paris and New York continued. London grew sell-out by 1% driven by monobrand stores, while Paris had a sell-out index of 68. The Win City Paris results were affected by a high comparable in monobrand last year. The company-owned stores in Paris had sell-out growth of 10%. New York, added in Q4 22/23, generated Win City sell-out growth of 13% in the quarter.
• Bang & Olufsen also announced that Beosound Emerge has been Cradle to Cradle Certified at Bronze Level. Cradle to Cradle is one of the world's most trusted science-based frameworks for designing and manufacturing responsible and circular products.
• The company announced a product collaboration with Ferrari, launching four products in limited quantities, sold in the Bang & Olufsen branded stores, the company’s own eCom, and in selected Ferrari channels.
• Bang & Olufsen continued the optimisation of the channel network to ensure a luxury brand experience. Consequently, selected multibrand partnerships across regions were discontinued.

Outlook 2023/24